Television’s advance advertising commitments for 2020, better known as the “upfront” market, was absolutely horrendous, Variety reported this week.
The upfront market for the next year could be down as much as 20%, six media executives and ad buyers familiar the industry’s annual negotiations for its next programming cycle told Variety.
The projected shortfall is the result of the coronavirus pandemic crippling TV sponsors as well as the inability of TV networks to showcase original content because the pandemic has delayed productions.
Insiders fear the drop in advertising outlays could become permanent as more of the viewing public turns to streaming and on-demand video.
“Things we thought would happen in 18 months or two years are happening in real time,” one media executive told Variety. “What may have been the right path six months ago will have to go out the window.”
At a time when TV is desperate for ad dollars, this trend could make it even harder to get them.
NBC, ABC, CBS, Fox and the CW have seen the volume of ad commitments secured for the next cycle of primetime programming fall by at least 9.3% and as much as 14.6%, according to Variety estimates. This is the first time since 2015 that the upfront estimates have fallen.
Variety estimates the five networks secured $8.2 billion to $9.8 billion for their 2020-2021 primetime schedules, compared with $9.6 billion to $10.6 billion for primetime in the 2019-2020 season. The 2019 upfront volume grew 5.5% to 7.4% over 2018.
The numbers should be taken as directional indicators, not hard, cold cash, said Variety. But they still serve as a guide as to where money is being spent. In recent years, the growing upfront spend had led the networks to believe money would keep flowing despite ratings erosion and viewers moving to streaming options.
The new numbers upend that theory. Still, some media executives said they expected worse.
Big advertisers, such as movie studios, retailers, restaurant chains and travel-related companies have been shut down because of the pandemic, giving them little reason to advertise. In addition, many of these companies are facing financial difficulties, and advertising is one of the first things eliminated in this kind of environment.
The companies that have been advertising include insurance companies, drug makers and consumer goods giants. Many of these companies have a long association with TV, which has given them more favorable pricing rates.
The media executives told Variety they believe the volume of ad commitments at cable networks could be down by at least 20%.